Crimea Referendum aftermath -- Tuesday March 18 , 2014 - Examining sanctions , Crimea moving forward as an independent state , while waiting for the next shoe to fall in Ukraine

China "Ready To Cooperate" With Crimea

China, having abstained from voting against Russia in the UN, has been relatively quiet during this crisis... until now... As ITAR-TASS reports, spokesperson for China's Ministry of Commerce Shen Danyang said that while "the situation in Ukraine remains tense," and they are watching developments, "we are ready for cooperation with Crimea after the situation there gets back to normal.” This appears to implicitly recognize Crimea as its own region - as opposed to part of Ukraine - even after this morning's "very strict anti-secessio One China policy" comments.

China will develop cooperation with Crimea after the situation in the republic stabilizes, spokesperson for China's Ministry of Commerce Shen Danyang told a news conference on Tuesday.

Commenting on the results of Crimea’s referendum and the future of China’s investment projects, the spokesman said:“The situation in Ukraine remains tense. We are closely following the latest developments.”

“Trade cooperation between China and Ukraine continues to develop as usual,” he said. “However, devaluation of Ukraine’s currency will have a certain impact on Ukrainian-Chinese trade relations.”

Shen stressed that the current situation was “temporary”.

“China will continue developing mutually-beneficial cooperation,” he said. “We hope that the situation in Ukraine will stabilize very soon. As for Crimea, we are ready for cooperation after the situation there gets back to normal.”

Is China stirring? By specifiying trade deals with Ukraine and Crimea separately?

This follows earlier comments that appeared to be anti-Russia to some extent:

"China always respects the sovereignty and territorial integrity of all states. The Crimean crisis should be resolved politically under the frameworks of law and order. We call on all sides to remain calm and exercise restraint to avoid further escalation of the tension," said Chinese Foreign Ministry Spokesman Hong Lei.

"China has a very strict anti-secession One-China policy."

Ukrainian Military "Authorized" To Use Live Ammo For Self-Defense

So, "supporters" of one side that has promised not to escalate (but believes the region belongs to them based on an overwhelming vote) has killed a soldier from the other side (which has promised to respond) as he defended a military base for his country...

*UKRAINE DEFENSE MINISTRY SPOKESMAN MOTUZYANYK SPEAKS BY PHONE

*UKRAINE AUTHORIZES LIVE AMMO USE FOR SELF DEFENSE: MOTUZYANYK

*UKRAINE AUTHORIZES LIVE AMMO AFTER CRIMEA DEATH: MOTUZYANYK

*UKRAINE LIVE AMMO AUTHORIZATION IN CRIMEA ONLY: SENYK

Does that mean war has started?

Is This The Provocation? Ukraine Soldier Allegedly Killed By Russians In Crimea

As feared earlier, the attack by "unidentified" forces on a Ukrainemilitary base in Semferopol has resulted in fatalities:

*UKRAINE SOLDIER KILLED AFTER UNIDENTIFIED GUNMEN STORMED BASE

*UKRAINE SOLDIER'S DEATH IN CRIMEA CONFIRMED BY DEFENSE MINISTRY

And two further "self-defense" fighters are injured. Once again it seems the market misread Putin's comments and one wonders how will Turchynov respond?

The incident occurred in Crimea's main city of Simferopol, regional defence ministry spokesman Vladislav Seleznyov said, without specifying whether the base was stormed by Russian soldiers or pro-Kremlin militia who also patrol the peninsula.

Via Interfax,

One self-defense fighter has been killed and two more injured in Simferopol, according to the Crimean news agency which cited a source in the republic's Interior Ministry.

The self-defense fighters were shot by a sniper from an uncompleted building opposite a Ukrainian military base, the source said.

One of the things that Putin failed to mention in his nearly hour-long annexation speech, was the topic of retaliation to Western sanctions, leading many to assume he wouldn't even bother. Moments ago Reuters provided some clarity on this issue:

President Vladimir Putin said on Tuesday that Western attempts to frighten Russia with sanctions over its takeover of Ukraine's Crimea region would be viewed as an act of aggression, and that Moscow would retaliate.

We expect details wil be forthcoming, and that the west, whose every bluff has been called, and every gambit has failed, will need another teleprompted conference by the leader of the "Free world" Obama, explaining - once again - just what the costs, red lines, and escalating sanctions against Russia will be.

It's deja vu all over again in markets this morning as the fact that Vladmiti Putin did not use the words "we're gonna nuke 'em all" and, just as he did 2 weeks ago, confirmed "Russia would not seek confrontation in West and East" and did not announce sanctions (which last time ended with the referendum and annexation of Crimea); has left algos believing that the world is calm once again and the buying spree can continue. Stocks, thanks to the helping momo-sparking hand of EURJPY, have jerked another 12 points higher on the news; gold and silver are limping lower; there is dollar weakness (EUR strength); and Treasury yields are up 3-4bps. However, Russian stocks and the Ruble continue to strengthen (in a nothing can hurt us now manner).

Putin: Crimea similar to Kosovo, West is rewriting its own rule book

Russian President Vladimir Putin addresses the Federal Assembly, including State Duma deputies, members of the Federation Council, regional governors and civil society representatives, at the Kremlin in Moscow March 18, 2014. (Reuters / Maxim Shemetov)

The referendum on independence in Crimea was conducted in strict accordance with democratic principles and the international law, President Vladimir Putin told the Federal Assembly, as he was welcomed by a standing ovation.

Putin stressed that the results of the referendum, in which more than 82 percent of Crimean residents came to polling stations and more than 96 percent of those voted for rejoining Russia, leave no room for equivocation.

He said the history of Crimea, its cultural, religious and spiritual ties bind it with the peoples of Russia, Ukraine and Belarus, which explains the attitude Russians have towards the peninsula.

The president said Crimea had dark pages in its past, particularly the persecution of Crimean Tatars and other minorities in the USSR. The authorities of Crimea seek to recompense for those ills. One such move would be accepting the language of Crimean Tatars as an official language in Crimea on par with Russian and Ukrainian.

Putin lashed out at former Soviet leader Nikita Khrushchev, under whose rule Crimea was attached to the Soviet Ukraine without any regard for Crimeans’ wishes and in violation of the laws of the time.

Crimean separation from Russia was reinforced again after the split of the Soviet Union, Putin said. This could be partially blamed on Moscow too, as it hailed the so-called “parade of sovereignty” of the Soviet Republics.

Russia has since respected the results of the USSR’s dissolution, including Crimea’s being part of Ukraine.

Russia’s position was based on the assumption that Ukraine would remain a friendly partner respecting the historic ties between the two countries. Russia continues and will continue to see these relations as most important.

Putin criticized several governments in Kiev for neglecting average Ukrainians, seeing the country as a source of profit.

He said he sympathized with Ukrainians who took to the streets of Kiev in protest against President Yanukovich, whom they saw as profoundly corrupt.

But the new authorities who replaced Yanukovich after an armed coup are to a large degree controlled by the radical nationalists, Putin stated.

Those same radicals voiced threats against Ukrainians who resist their rule, particularly those living in Crimea.

Turning a blind eye to those threats and the moves of the new authorities, which violated the rights of ethnic Russians in Ukraine, would be betrayal on part of Russia, Putin said.

The president brushed aside the allegations that Russia “invaded” Crimea ahead of the referendum. He said Moscow only reserved the right to use its troops to protect ethnic Russians from the radicals, but never did so.

Russian President Vladimir Putin addresses the Federal Assembly, including State Duma deputies, members of the Federation Council, regional governors and civil society representatives, at the Kremlin in Moscow March 18, 2014. (Reuters / Maxim Shemetov)

Whatever troops Russia has in Ukraine are present lawfully, since Russia can deploy up to 25,000 troops as part of the contract to maintain its naval base in Crimea, Putin said.

Putin dismissed criticism of the Crimean referendum, which calls the move illegitimate. He cited Kosovo’s unilateral declaration of independence as an example of self-determination praised by the West.

That ballot was ruled legitimate from the standpoint of international law by the International Court of Justice, and the same rule applies to Crimea, he said.

He dismissed the notion that Kosovo was a unique case due to the bloodshed and ethnic conflicts in Yugoslavia, a position maintained by Washington.

The ICJ says nothing about number of victims in justifying Kosovo’s secession from Serbia, Putin said.

Russia dismisses the “need” for victims for Crimea to declare independence, Putin said. He added that there could be victims there, if it were not for the Crimean self-defense forces, which prevented any possible provocations.

The Russian president also praised the Ukrainian military in Crimea, who showed restrained during the crisis and did not allow any bloodshed in the defiant peninsula.

Putin accused the West of cheating Russia on many occasions, doing whatever it wants in pursuit of its own interests regardless of the legality of such actions. He said it was high time for Western powers to admit that Russia has its own international agenda and national interests too, and that they must be respected.

Russia would not tolerate the expansion of NATO to its borders and the military threat it poses, Putin said. Moscow is not against cooperation with NATO, but only if it is done with mutual respect.

Putin said that amid the Ukrainian turmoil and considering the historic context, he understood well why the Crimean people chose to join Russia. Any other status would not ensure the stability and safety of Crimea. Crimea wants to be under a stable sovereignty, and the fact is that this sovereignty may only be Russian, he stressed.

The Russian population is overwhelmingly in favor of accepting Crimea as part of Russia, Putin said.

Considering all those factors, Putin is submitting a draft federal law which would incorporate Crimea and the City of Sevastopol into Russian territory, as well as a request to ratify an international treaty with the government of Crimea to make this happen. He said he was sure of the legislature’s support for both documents.

and........

Putin Formally Annexes Crimea, City Of Sevastopol To Russian Federation

PUTIN SAYS WILL SUBMIT DRAFT LAW ON BRINGING CRIMEA INTO RUSSIA TO PARLIAMENT ON TUESDAY

PUTIN CALLS FOR RATIFICATION OF TREATY ON CRIMEA, SEVASTOPOL

And the inevitable conclusion:

RUSSIA, CRIMEA, SEVASTOPOL SIGN AGREEMENT ON ENTERING ACCESSION

And futures, stocks, and risk in general is soaring, sending the Kremlin precisely the message it needs to know that there is absolutely nothing wrong with this. Perhaps if Russia had annexed all of Ukraine, or the Baltics, or maybe even Poland, the S&P would have soared over 2000 already?

Army 'Ready for Combat' Over Crimea

While insisting they remain committed to “diplomacy” in their ongoing dispute over possession of the Crimean Republic, Ukraine’s interim government today announced afull military mobilization, preparing for war.

Many in the newly installed Ukraine government see war with Russia as inevitable, and the military is digging defensive trenches along their eastern border with Russia, while officials pledge harsh crackdowns against ethnic Russians in Donetsk, who supported the ousted elected government and have protested the new one.

Interim Defense Minister Ihor Tenyukh insisted that Crimea “will be our territory,” and that the troops still deployed in Crimea will not withdraw. Russian and Ukrainian officials announced a “truce” over those bases until Friday, hoping cooler heads would prevail.

Yet protest leader Vitali “Dr. Ironfist” Klitschko insisted that Friday won’t change anything, and the troops will remain beyond the date to control the bases.

Interim Justice Minister Pavlo Petrenko insisted that between now and Friday the Army needs to be “ready for combat” and that the interim government’s goal is “to restore the military might of Ukraine.”

Despite the bellicose talk, Sen. John Barrasso (R – WY) says interim PM Arseniy Yatsenyuk told him a quite different story of a military where “nothing flies, nothing shoots and nothing works,” and urged major US military aid for his country. Though President Obama has pledged support for Ukraine’s new government regaining control of Ukraine, so far they have stopped short of pledging military backing for a war against Russia.

Tuesday, March 18

02:35 GMT:

Tokyo is set to impose sanctions against Russia after it recognized Crimea as an independent state, a top government spokesman said on Tuesday. The “Japanese government does not recognize the referendum in Crimea," Chief Cabinet Secretary Yoshihide Suga has said. As part of the sanctions Japan will suspend talks on an investment pact and relaxation of visa requirements. "The recognition of Crimean independence by Russia violates Ukraine's sovereignty and territorial integrity and is regrettable," Suga told a news conference.

01:21 GMT:

Crimea is self-sufficient in terms of food stocks for at least a month in case there is a disruption in supply, Interfax quoted Crimea’s Deputy Prime Minister Rustam Temirgaliev as saying in an interview to ‘Rossiyskaya Gazeta’. Temirgaliev also said that Crimea has gas reserves for a year.

01:21 GMT:

As a new Russian entity Crimea will be incorporated into existing development programs only in two to three years, Regional Development Minister Igor Slyunyaev said in an interview with Kommersant to be released Tuesday.

00:39 GMT:

Fireworks lit up the night as more than a thousand supporters celebrated the result of the Crimean referendum at a pro-Russia rally in Sevastopol on Monday, Ruptly news agency reports.

Participants waved Russian flags while chanting slogans such as "Crimea, Sevastopol, Russia,""Fascism will not pass" and "Thank you Putin," and donned clothes that featured the Russian colours and symbols.

Monday, March 17

23:41 GMT:

The head of Ukraine’s Donetsk regional administration Sergey Taruta along with his brother used their own finances to dig a trench on the border with Russia to reportedly ensure security in the area, Interfax Ukraine reported.

22:51 GMT:

Russia will ask Ukraine to pay $20 billion debt dating back to the Soviet Union era, if Kiev tries to revise the agreement that regulated the partition of property upon the dissolution of the USSR, Itar-Tass quoted Russia’s Foreign Ministry as saying.

21:39 GMT:

Canada has introduced additional sanctions following the Crimean referendum. Canadian Prime Minister Stephen Harper announced new economic sanctions and travel bans against some Russian and Ukrainian officials “responsible for the crisis”.

“Today, our Government is announcing additional sanctions that will serve to further isolate Russia from the international community,” Harper said in a statement. “Targeted sanctions through regulations under the Special Economic Measures Act build on sanctions already in place, and are being imposed against senior Russian officials as well as additional Ukrainian officials. The individuals targeted are responsible for undermining the sovereignty and territorial integrity of Ukraine and for facilitating Russian military action against Ukraine.”

20:41 GMT:

Delegates of the Inter-Parliamentary Union that met in Geneva refused to consider a resolution on the recent events in Ukraine, titled "Russian aggression against Ukraine”. The resolution was submitted by the delegations of Ukraine and Canada, which demanded that Moscow withdraw its troops from the territory of Crimea.

20:40 GMT:

UK proposed to give NATO its RAF fighters to participate in a mission to patrol the airspace in Eastern Europe beginning at the end of April, AP quoted the British Defense Minister Philip Hammond as saying in an address to the British Parliament.

20:25 GMT:

Germany and the European Union did not seek sanctions against 21 individuals alleged to be connected to the unstable political situation in Crimea, but were forced to do so following the Crimean referendum that was 'in clear breach' of international law, German Chancellor Angela Merkel said during a press conference in Berlin on Monday, Ruptly news agency reports.

Merkel's words came as she met with Italian Prime Minister Matteo Renzi. The Chancellor also added that she believed continued diplomatic discussions are the key to solving the crisis.

19:43 GMT:

Crimea’s Sunday referendum will worsen an “already complex and tense situation” in Ukraine, UN Secretary-General Ban Ki-moon was quoted by the spokesperson Stéphane Dujarric on Monday. “He encourages all parties to work for a solution that is guided by the principles of the United Nations Charter, including respecting Ukraine’s unity and sovereignty,” said Dujarric.

17:53 GMT:

France "may consider" cancelling the sale of Mistral-class warships to Russia in the case of further escalation in Ukraine, French media quoted the French Foreign Affairs Minister Laurent as saying.

Ukraine recalled its ambassador to Russia on Monday for consultations on the international ramifications of the situation in its Crimea region, which has voted to join Russia.

"In connection with the situation in Crimea and the necessity of discussing some of its international aspects, the Ukrainian side is recalling its ambassador to the Russian Federation, Vladimir Yelchenko,"the Foreign Ministry said. (Reuters)

14:54 GMT:

The names of Russian individuals who fall under the EU’s additional sanctions have been compiled independently of the US and without consultations with the Western neighbor, EU’s foreign policy chief Catherine Ashton said during a press-conference.

14:29 GMT:

The US has imposed sanctions against Russian and Ukrainian officials on Monday, with the White House stating that "the actions and policies" of the Russian government with respect to Ukraine"undermine democratic processes and institutions in Ukraine; threaten its peace, security, stability, sovereignty, and territorial integrity; and contribute to the misappropriation of its assets."

13:54 GMT:

NATO and Ukraine confirmed the intention to expand military cooperation and further develop Ukrainian military capabilities, Itar-Tass quoted NATO Secretary General Anders Fogh Rasmussen as saying after a meeting in Brussels.

“There will be a transitional period for some time. I think that in two months these problems will be solved,” he said. There is no customs “in the direct sense,” he said, adding that “we do not prevent goods crossing the border, we don’t have customs clearance.”

The prime minister said that the transitional period will be "soft enough" for entrepreneurs to regroup in accordance with the Russian legislation to sign new contracts. "Now everything is being developed, and in a day or two we will issue the appropriate declaration."

12:55 GMT:

European Union foreign ministers have agreed to impose sanctions including travel bans and asset freezes on 21 officials from Russia and Ukraine, Lithuania's foreign minister said on Monday.

After a meeting lasting around three hours, the EU's 28 foreign ministers quickly reached agreement on the list of those to be sanctioned.

He added that more measures would follow in a few days, when EU leaders meet for a summit in Brussels. They are expected to expand the list to include more senior figures closer to Russian President Vladimir Putin. (Reuters)

The Crimean parliament has approved the creation of a border police service and a number of other official bodies, said the Crimean State Council. The nascent administrative bodies will include a fisheries agency, a statistics department, and a commission for geology and natural resources. Furthermore, a number of administrative bodies have been turned into ministries following the referendum.

11:48 GMT:

The German government does not recognize the results of Crimea’s referendum on the grounds that it violates the Ukrainian constitution and is illegal under international law, said representative from the German cabinet Stefan Siebert.

“This referendum contradicts the Ukrainian constitution and international law. We regard it as illegal,” he said.

11:17 GMT:

The Russian Federation has donated $408 million to Crimea in aid, Crimean Prime Minister Sergey Aksyonov has announced.

10:51 GMT:

European Union foreign ministers will agree sanctions on around 20 people in Russia and Crimea on Monday, ministers and officials said, with the possibility of adding further names to the list when EU leaders meet later in the week.

Those targeted in the first phase will include politicians responsible for calling for and organising Sunday's referendum in Crimea, when 97 percent of voters decided to secede from Ukraine and join Russia.

The EU says the referendum was illegal and does not recognise the result.

"We are talking approximately about 20 people," Czech Foreign Minister Lubomir Zaoralek told reporters, saying the list was focused on "political individuals" behind events in Crimea, not on business people. (Reuters)

Ukraine's coup-imposed president Aleksandr Turchinov slammed Crimea's referendum as a "great farce" on Monday, in a first reaction from Kiev after the peninsula voted overwhelmingly to split from Kiev and join Russia.

Speaking in parliament, Turchinov condemned "the continued aggression in Crimea that Russia is trying to conceal with this great farce that they call a referendum and that will never be recognised either by Ukraine or by the civilised world." (AFP)

10:01 GMT:

The Republic of Crimea has addressed the UN seeking recognition as a sovereign state and called on Russia to integrate it into the Russian Federation. 96.77 percent of the Crimean population voted ‘for’ the integration in a referendum.

09:57 GMT:

Russian President Vladimir Putin will address the Federal Assembly on the integration of Crimea into the Russian Federation on Tuesday, a spokesperson for the State Duma told press. The address will begin at 15:00 Moscow time (11:00 GMT).

09:52 GMT:

Russia’s State Duma will consider a draft statement on the situation in Crimea on March 18.

“Tomorrow morning we will consider a statement on Crimea, as proposed by the leaders of the four factions and [Speaker] Sergey Naryshkin,” said the lower house of parliament’s first deputy speaker, Ivan Melnikov, RIA Novosti reported.

Melnikov said the draft statement will be the first item on the Duma’s agenda.

09:20 GMT:

Ukraine's parliament, seeking to boost the country's military force, endorsed on Monday a presidential decree to carry out a partial mobilisation involving 40,000 reservists.

Andrey Parubiy, the coup-imposed Secretary of the National Security and Defence Council, told parliament that 20,000 reservists would be deployed within the armed forces and the rest would be used within the newly-created National Guard. (Reuters)

Ukrainian servicemen guard a checkpoint near the village of Strelkovo in Kherson region adjacent to Crimea, March 16, 2014.(Reuters / Valentyn Ogirenko)

05:59 GMT:

All the necessary measures to ensure the legislative decisions concerning Crimea’s integration into the Russian Federation will be taken promptly, the United Russia party’s General Council Secretary Sergey Neverov said, as quoted by ITAR-TASS.

“The results of the referendum have shown that Crimea’s people only see their future in the integration into the Russian Federation, the population has voted to reunite the people that have always been living together,” Neverov added.

Currently, 75 percent of the ballots have been counted, with 95.7 percent of the Crimean population voting ‘for’ the integration of Crimea into the Russian Federation. The turnout was 82 percent.